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Charting old territory

When Didi Chuxing bought out Uber’s China operations in 2016 many observers thought it was the end of competition in the country’s ride-sharing industry (see WiC336). However, there have always been smaller players in the field and recently much stronger rivals have started to challenge the reigning champion.

One of them is Caocao, a one year-old start-up that is powered by a fleet of 12,000 electric vehicles produced by its parent firm Geely Automobile. Meanwhile, Shouqi, a state-owned car firm based in Beijing, became active last year.

Online travel agent Ctrip also announced in April it had obtained a licence to offer an on-demand car service but didn’t specify when its new service would be launched.

Ctrip’s news came just a month after Meituan, the self-described “Amazon for services”, opened its own car-hailing operations in Shanghai to rival Didi.

Meituan had been trialling its ride-sharing business in Nanjing for a little less than a year before expanding it to Shanghai. Days before the official launch, a picture leaked from one of Meituan’s internal meetings revealing it had adopted the battle cry “Exterminate Ele.me; Eliminate Didi”.

In targeting Ele.me as well, Meituan has pitted itself against Alibaba in more ways than one. Alibaba bought the food delivery service Ele.me earlier this year. And apart from owning a stake in Didi, the e-commerce giant is a player in its own right in the increasingly crowded ride-hailing sector. How so? In 2014 Alibaba acquired a local mapping service called AutoNavi, also known as Amap, or Gaode in Chinese. Amap provides mapping data for the likes of Google and Apple but its own map service is the most popular in China. According to consultancy Jiguang, Amap boasts 340 million monthly active users (MAUs). That’s 100 million more than the older Baidu Maps, which most would assume was China’s leading cartographer. (Amap is particularly favoured by professional drivers for its accurate assessment of traffic conditions – and consequent ability to determine the quickest routes – as well as for flagging speed camera locations. A driver that WiC used over a five-day period fairly recently gave it a glowing testimonial.)

Since the takeover by Alibaba, Amap has been planning to expand beyond its primary service. Last year, copying a move from Baidu Maps, it began allowing users to book taxis in-app.

Amap doesn’t offer taxi services itself, rather it provides a platform for users to browse and choose from the available alternatives. Users enter their destination on the map and are shown taxis available from Didi, Caocao, Shouqi and other ride-sharing apps. They can then choose one and pay through Amap.

Although this service has been in operation for the past year, a recent round of promotions has signalled Amap’s desire to become a more proactive player in the market.

According to Jiemian, Amap is currently offering 30% discounts Caocao rides and will rebate up to Rmb25 ($3.70) from fares booked with Shouqi. The news site reports that under Amap’s promotional offers, prices of the three competing taxi operators have almost reached parity.

Unlike the actual service providers, Amap doesn’t take commission from drivers for rides booked through its app. For Amap and Alibaba, the payoff comes from gathering user data (as well as the payment being routed through Alipay). Information on customer travel is a useful aid to Alibaba’s own logistics operations and helps it tackle “last mile delivery”. Additionally it can be used to sell smart infrastructure to local governments via Ali’s City Brain programme (see WiC405).

However, there are reasons why a customer might want to go directly to the service provider, rather than stay within Alibaba’s ecosystem. According to Jiemian, a Didi ride booked through Amap doesn’t appear on the user’s Didi account. This means that if something does go wrong during the transaction, there is no record of the event. Also when booking through Amap the user isn’t shown the driver’s full credentials. That will be viewed by women in particular as a security issue after the high-profile rape and murder of a flight attendant by a Didi driver in May (see WiC409).

An Amap representative told Jiemian that the level of security it offers is the same as that guaranteed by direct service providers, and the company operates a 24-hour hotline for handling customer issues.

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